Product Market Monopolies and Labor Market Monopsonies:
This paper unveils a novel externality of product market regulation in the labor market. It shows theoretically and empirically that higher barriers to entry in product markets translate into higher labor market power, measured by the wage markdown-the ratio between the marginal product of labor and...
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| Format: | Elektronisch E-Book |
| Sprache: | English |
| Veröffentlicht: |
Washington, D.C
The World Bank
2023
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| Schlagworte: | |
| Online-Zugang: | Volltext |
| Zusammenfassung: | This paper unveils a novel externality of product market regulation in the labor market. It shows theoretically and empirically that higher barriers to entry in product markets translate into higher labor market power, measured by the wage markdown-the ratio between the marginal product of labor and the wage. The literature suggests that this wedge can distort factor allocation, resulting in lower aggregate output and employment, but also in higher inequality through a reduction in the labor share of national output. Using variation in investment restrictions across 346 manufacturing product markets in Indonesia, the analysis finds that wage markdowns increase by 25 percent in product markets that become subject to investment restrictions. The result is rationalized using a simple oligopsony model in which higher entry costs reduce the equilibrium number of firms, thereby limiting employment options for workers and, hence, their labor market power. Instrumental variable estimates support the model's prediction that lower entry is the main driver of the positive relationship between investment restrictions and wage markdowns |
| Beschreibung: | 1 Online-Ressource (57 Seiten) |
| DOI: | 10.1596/1813-9450-10388 |
Internformat
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| 520 | 3 | |a This paper unveils a novel externality of product market regulation in the labor market. It shows theoretically and empirically that higher barriers to entry in product markets translate into higher labor market power, measured by the wage markdown-the ratio between the marginal product of labor and the wage. The literature suggests that this wedge can distort factor allocation, resulting in lower aggregate output and employment, but also in higher inequality through a reduction in the labor share of national output. Using variation in investment restrictions across 346 manufacturing product markets in Indonesia, the analysis finds that wage markdowns increase by 25 percent in product markets that become subject to investment restrictions. The result is rationalized using a simple oligopsony model in which higher entry costs reduce the equilibrium number of firms, thereby limiting employment options for workers and, hence, their labor market power. Instrumental variable estimates support the model's prediction that lower entry is the main driver of the positive relationship between investment restrictions and wage markdowns | |
| 650 | 4 | |a Firm Entry | |
| 650 | 4 | |a Labor Market | |
| 650 | 4 | |a Labor Market Power | |
| 650 | 4 | |a Law and Development | |
| 650 | 4 | |a Minimum Wage Markdown | |
| 650 | 4 | |a Minimum Wage Reduction | |
| 650 | 4 | |a Monopoly | |
| 650 | 4 | |a Monopsony | |
| 650 | 4 | |a Product Market Regulations | |
| 700 | 1 | |a Presidente, Giorgio |e Sonstige |4 oth | |
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Datensatz im Suchindex
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| discipline | Wirtschaftswissenschaften |
| discipline_str_mv | Wirtschaftswissenschaften |
| doi_str_mv | 10.1596/1813-9450-10388 |
| format | Electronic eBook |
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| id | DE-604.BV049079200 |
| illustrated | Not Illustrated |
| index_date | 2024-07-03T22:27:55Z |
| indexdate | 2024-10-12T04:02:46Z |
| institution | BVB |
| language | English |
| oai_aleph_id | oai:aleph.bib-bvb.de:BVB01-034341091 |
| oclc_num | 1392139378 |
| open_access_boolean | 1 |
| owner | DE-12 DE-521 DE-573 DE-523 DE-Re13 DE-BY-UBR DE-19 DE-BY-UBM DE-355 DE-BY-UBR DE-703 DE-91 DE-BY-TUM DE-706 DE-29 DE-M347 DE-473 DE-BY-UBG DE-824 DE-20 DE-739 DE-1043 DE-863 DE-BY-FWS DE-862 DE-BY-FWS |
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| physical | 1 Online-Ressource (57 Seiten) |
| psigel | ZDB-1-WBA |
| publishDate | 2023 |
| publishDateSearch | 2023 |
| publishDateSort | 2023 |
| publisher | The World Bank |
| record_format | marc |
| spellingShingle | Cali, Massimiliano Product Market Monopolies and Labor Market Monopsonies Firm Entry Labor Market Labor Market Power Law and Development Minimum Wage Markdown Minimum Wage Reduction Monopoly Monopsony Product Market Regulations |
| title | Product Market Monopolies and Labor Market Monopsonies |
| title_auth | Product Market Monopolies and Labor Market Monopsonies |
| title_exact_search | Product Market Monopolies and Labor Market Monopsonies |
| title_exact_search_txtP | Product Market Monopolies and Labor Market Monopsonies |
| title_full | Product Market Monopolies and Labor Market Monopsonies Massimiliano Cali |
| title_fullStr | Product Market Monopolies and Labor Market Monopsonies Massimiliano Cali |
| title_full_unstemmed | Product Market Monopolies and Labor Market Monopsonies Massimiliano Cali |
| title_short | Product Market Monopolies and Labor Market Monopsonies |
| title_sort | product market monopolies and labor market monopsonies |
| topic | Firm Entry Labor Market Labor Market Power Law and Development Minimum Wage Markdown Minimum Wage Reduction Monopoly Monopsony Product Market Regulations |
| topic_facet | Firm Entry Labor Market Labor Market Power Law and Development Minimum Wage Markdown Minimum Wage Reduction Monopoly Monopsony Product Market Regulations |
| url | https://doi.org/10.1596/1813-9450-10388 |
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